Taiwan was called the Republic of China for the last fifty years, but today it is trying to change its official name to Taiwan. Along with the name change, the identity of the Taiwanese people is also changing. The change in the identity of a nation never happens without political interference; However, the Taiwanese government's political decisions are also linked to its economic policy. In this article, I will attempt to resolve the complex relationships between Taiwan's changing national identity, political and economic policies, as well as its relationship with its counterpart, the People's Republic of China. Before we get into analyzing the current situation, let's first review the history of Taiwan and the intertwined relationship between the PRC and the Republic of China. The island of Taiwan has only been considered an important place by a few emperors throughout Chinese history. It has been officially part of Chinese territory since the Ming dynasty in the 17th century, after the expulsion of Dutch settlers from the island. Taiwan was later taken over by Japan in 1895, when the "Treaty of Shimonoseki" was signed after the defeat of the Qing army in the First Sino-Japanese War. Then the Republic of China retook Taiwan from Japanese control in 1945, when Japan surrendered at the end of World War II. In early 1949, when the Chinese Nationalist Kuomintang Party (KMT) was defeated by the Chinese Communist Party (CCP) in the Chinese Civil War, the KMT withdrew to the island of Taiwan, which was the only remaining territory under control. of the Republic of China. (ROCK). Over the past two decades, the Republic of China has struggled to maintain its international influence, while trying to establish or strengthen a new national identity, Taiw...... middle of paper ..... . Regional Stability, Palgrave Macmillan 2012. National Statistics, Executive Yuan Statistics Department. 2011. National Statistics, Republic of China, www. tradingnomics.com, accessed 10/12/2013Ng, Yuzin Chiautong, Historical and legal aspects of the international status of Taiwan (Formosa), Formosans united in the world for independence (Tokyo), 1972. “Population of Taiwan”, china .com. cn, accessed 12/12/2013 Rios, Xulio, “The evolution of relations between mainland China and Taiwan during the term of Hu Jintao: from the anti-session law to the application of the ECFA”. Taiwan Scholarship Program 2012, Ministry of Foreign Affairs, Republic of China. 2012Rosen, Daniel and Zhi Wang, “Deepening China-Taiwan Relations Through the Economic Cooperation Framework Agreement,” Peterson Institute for International Economics, No. PB10-16. 2010.